Corruption Watch: Congressmen Awarding Big Defense Contracts to Companies in Which They Own Stock

Congressmen Michael McCaul and Kenny Marchant of Texas and Richard Hanna of New York all have two things in common. One, according to their personal financial disclosures, they own stock in defense contractor Pratt and Whitney. Two, they are all members of the F-35 Caucus, a group of Congressmen dedicated to awarding more contracts to defense contractors like, well, Pratt and Whitney.

The Secretary of Defense, the Pentagon, White House officials, and Senator John McCain (R-AZ) all agree: Spending hundreds of millions for new F-35 engines are a waste of taxpayer money. The planes have already cost taxpayers over $56 billion in research and development. Constant cost overruns have turned a plane that was supposed to cost $69 million each into one that now comes with a $156 million price tag. Some suggest that the entire F-35 program could spiral out of control and cost taxpayers more than $1 trillion over fifty years.

Defense contractors are pushing back against proposed cuts aggressively. In addition to increased lobbying spending and pro-F-35 advertisements in the Metro stops of Washington D.C., members of Congress agreed to form a “F-35 Caucus” to keep the taxpayer money flowing to the companies. As the Center for Responsive Politics noted, the F-35 Caucus members collectively received over $325,400 in contributions from the companies that make the F-35, including Pratt & Whitney, Lockheed Martin, Northrop Grumman, and BAE Systems.

Republic Report has reviewed the personal finance disclosures of F-35 caucus, and found that a number of the lawmakers are also personally invested in the companies that produce the F-35:

— F-35 Caucus Member Congressman Michael McCaul (R-TX) owns between $350,000 and $750,000 in stock in the parent company of Pratt & Whitney.

— F-35 Caucus Member Congressman Kenny Marchant (R-TX) over $11,000 in stock with Northrop Grumman, over $5,000 in stock with Lockheed Martin, and over $5,000 in stock with the parent company of Pratt & Whitney.

— F-35 Caucus Member Congressman Richard Hanna (R-NY) owns up to $50,000 in stock with Lockheed Martin, and up to $15,000 in stock with the parent company of Pratt & Whitney.

Congressman Norm Dicks (D-WA), whose campaign committee is a top recipient of F-35 contractor cash, is helping to lead the F-35 Caucus along with Congresswoman Kay Granger (R-TX).

In February, Congress refused to attach Senator Sherrod Brown’s (D-OH) strong reform amendment to the Stock Act that would have forced legislators to place their investments in a blind trust. So, this form of corruption goes on as perfectly legal.

This post was written with valuable research help from intern Haley Streibich.

Great detail in this article. I hadn’t found any information regarding stock ownership of the caucus members and that is alarming to learn about. Thank you for bringing this to our attention. To add perspective to your comment “the F-35 Caucus members collectively received over $325,400 in contributions from the companies that make the F-35”, this amount is nearly double what they gave to the average representative not in this specific caucus. In addition to the company contributions, there are employee contributions. Members of Congress supporting this caucus have received nearly twice as much money from employees of the top four contractors as the members who are not supporting it.

Do you mean to tell me that my Republican congressman, Michael McCaul, who represents my otherwise liberal, mostly Democratic city due to GOP gerrymandering, didn’t become the wealthiest person in the House by being an upstanding and honest member of society? Why does this not surprise me, in the least?

CatKinNY

What list does Paul Ryan (R WI) belong on? He called the Pentagon brass liars last week because they didn’t want the increases in his proposed budget, which simultaneously doubles tax cuts for millionaires (all in the name of fiscal austerity), and pays for these increases in expenditures by destroying Medicare and Medicaid and cutting the rate of growth for all programs for the poor so they will fall well behind the growth in population. Who owns him? Surely it’s not just the ghost of Ayn Rand.

Republic Report is dedicated to rooting out the corruption that is so corrosive to American values. We investigate and uncover the buying and selling of politicians and of institutions entrusted with upholding the public interest. We expose how big money distorts major policy decisions – harming our economy and our people.